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Obama's answer to the line-item veto

From NBC's Athena JonesWASHINGTON -- As part of what the administration sees as its efforts to reduce unnecessary spending and demonstrate President Obama's commitment to getting the country's fiscal house in order, the president is proposing legislation that would force Congress to vote on a package of White House-proposed cuts to spending bills.

The legislation is the Obama administration's answer to the line-item veto, which the Supreme Court struck down in 1998. Under the bill, which Congress must approve, the president would submit a package of rescissions to Congress within 45 days after passage of a spending bill. The package of cuts would cover discretionary spending and non-entitlement mandatory spending and it would be taken up first by the House. Once passed there, the Senate would have 25 days to vote on it.

"The line-item veto gave the knife to the president," Peter Orszag, director of the White House Office of Management and Budget, said in a conference call with reporters. "That was unconstitutional. Here, we are providing a way for the president to give the knife back to Congress to help it cut out unnecessary fat."

Even though data show the economy is pulling out of its worst economic crisis since the Great Depression, Americans remain concerned about the ballooning budget deficit, a fact Republicans have sought to use to their advantage.

Obama has repeatedly tried to show he is concerned with fiscal restraint, for instance by setting up a bipartisan debt commission to look at ways to reduce the deficit; signing new PAYGO legislation, which requires new spending or tax cuts be offset by reductions elsewhere and by proposing a three-year freeze on non-security discretionary funding -- a move the White House says will save $250 billion over the next 10 years relative to continuing the 2010 funding levels.

In a speech today at Johns Hopkins University, Larry Summers, an economic adviser to the president, said steps to reduce the deficit -- projected to be $1.5 trillion or more than 10 percent of GDP this year -- would cut it in half as a share of the economy over the next two to three years, marking the fastest rate of deficit reduction since World War II.

Similar proposals to provide the president with the power to make cuts to spending bills went down to defeat in Congress and prospects for this legislation are unclear. Orszag said several members of the budget team had participated in briefings with members of Congress on the proposal and said he was "hopeful" about passage.

"I think you're going to see an embrace from those who are most concerned about eliminating unnecessary spending," Orszag said. "I think the fiscal context has changed as it became necessary to combat a severe economic downturn and ongoing deficits have become a growing concern."